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Public beneficial ownership registries- a shot in the arm in the fight against Illicit Financial Flows

 

There is a quote that says – “it’s easier to lie in public”. As the world continues to work towards curbing illicit financial flows, it is acknowledged that transparency is a key ask in the fight. Related to this, the Anti- Corruption Summit 2016 was held in London and brought countries from around the world to discuss the ever growing and ever evolving menace of corruption as well as chart a way forward in terms of dealing with it. Out of the many issues the summit covered, beneficial ownership was one of the areas of discussion and commitment.

According to the High Level Panel on Illicit Financial Flows, a beneficial owner refers to “the real person or group of people who control(s) and benefit(s) from a corporation, trust, or account. The Financial Transparency Coalition advocates that beneficial ownership information be collected and made publicly accessible. Transparency of beneficial ownership is one of the five FTC recommendations.” Anonymous companies moving finances from developing countries to tax havens makes it very hard to fight the flows as there is no knowledge of who is behind these companies. Public beneficial ownership registries will indeed go a long way towards fighting Illicit Financial Flows.

At the Summit, the issue of beneficial ownership generated the largest number of commitments with 36 countries committing to a whopping 110 commitments. Nigeria made 6 commitments, Kenya made 3 and Ghana made 1. Transparency International grouped the commitments into “ambitious”, “somewhat ambitious” and “not ambitious”. All the three countries i.e.: Nigeria, Ghana and Kenya had at least 1 ambitious commitment which in itself is a good sign.

Commitments are indeed an encouraging sign, however like so many other commitments and pledges on the African continent, the proof is in the implementation. It is on this premise that Transparency International brought together civil society, government, private sector and journalists to begin the work of following up on and pushing implementation of the commitments their respective governments had made at the summit. This was the initial kick off meeting of a longer project geared at supporting a push for implementing these commitments in the three countries.

The project will work towards collecting, sharing and using information in a collaborative way towards the full implementation of eventual public beneficial ownership which contribute towards the big fight against corruption. Specific deliverables of the meeting were:

  1. Identification of country-specific strengths and weaknesses in current legal frameworks in Ghana, Kenya and Nigeria, issuing recommendations on policy and legal reform and mapping next steps.

We will produce three tailored country reports with recommendations for policy and legal reform.

  1. Increased awareness and understanding on the part of key stakeholders (civil society, government, business, and law enforcement communities) in Ghana, Kenya and Nigeria on how beneficial ownership information can be collected, shared and used to tackle corruption.

We will produce a guide on how stakeholders can work together to realise the goal of public beneficial ownership information and increase the knowledge and capacity of civil society actors.

  1. Maintain pressure beyond the twelve months and increase the likelihood of generating sustainable change by establishing collaborative working relationships between diverse stakeholder groups.

In each country we will support and consolidate three ongoing high quality multi-stakeholder dialogues on beneficial ownership transparency.

The meeting was opened by the new Vice President of Ghana – Mahamudu Bawumia who reiterated Ghana’s commitments to financing the fight against corruption and specifically fully implementing a beneficial ownership regime. TJN-A attended as a technical expert because of our work on tax justice on the continent. The meeting saw a number of presentations made from open government, open contracting, open ownership, banks and private sector, CSOs to name a few.

Presentations seamlessly weaved global expert lessons and models in with current dynamics in the three African countries to help participants think through viable options that would be best fit for their countries. Key areas covered conversations of Hawallas and beneficial ownership, issues of privacy, data verification as well as prosecution options.

By the end of the meeting, the three countries had drawn a workplan for the year in terms of engagement points they could engage on to push the beneficial ownership agenda. They outlined practical things they could do to make sure that 2017 is the year that turns commitments made at a summit in London to actual tangible implementation that begins to change the course of the African continent.

The Financial Transparency Coalition states : “Making anonymous companies a relic of the past will help create a global financial system that’s transparent and accountable and that works for everyone.”

TJN-A continues to follow progress of Ghana, Nigerian and Kenya in their implementation of their commitments and we continue to keep you all updated.

17/02/2017

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